Candidate: The overall objective of this K18 Career Enhancement Award application is to provide the resources for enhanced training for the principal investigator so that he will become an independently funded surgical scientist who will contribute at a national level in stem cell biology leading to new cell therapies for liver disease. The principal investigator has enlisted the ongoing stem cell expertise of the following mentors: Terry Magnuson, PhD, Oliver Smithies, PhD, and Larysa Pevny, PhD, who are experts in stem cell and developmental biology. Retraining is required due to the length of time in the last seven years spent in clinical practice and patient-based research. There is a clear need to retrain in current recombinant DNA practices, advanced PCR analysis, and basic molecular biology in order to make the transition from clinical to basic science research. Environment: UNC-CH has a strong academic tradition and a commitment to training clinical scientists. The School of Medicine has a strong core facility including the Lineberger Cancer Center, the UNC Genomics Lab, the Confocal Microscopy Lab, and the Mouse Histology Facility to support all aspects of the basic stem cell research. Dr. Terry Magnuson, the stem cell mentor for this project, has an extensive track record of scientific success and is committed to the mentoring process necessary to carry this research to its fruition. Research: In this proposal, we will define the characteristics of embryonic stem cells in vitro as they differentiate in the hepatic lineage and co-culture with either embryonic cardiac mesoderm or hepatic progenitors. Our hypothesis is that Hepatic Progenitor (HP) cells signal Embryonic Stem (ES) cells to undergo tissue-restricted differentiation towards hepatocyte lineage in vitro that are capable of organ specific function in vivo. We will then investigate the biologic fate of these cells in vivo using a cellular transplant model of 2/3 partial hepatectomy. Growth factor culture conditions have been used to derive hepatocyte-like cells from ES cultures, but the in vivo function of the cells is unknown, and may be capable of producing malignancy. In addition, experiments in other organ systems suggest that manipulation of cell culture conditions alone is insufficient, but that cell-cell interactions are required in order to reconstruct and restore organ function. Furthermore, MHC expression, essential in the alloimmune response to liver transplants and the induction of tolerance, is not understood in ES cell development.